In Its New Avatar, PNB To Focus On Digital Transformation

Punjab National Bank (PNB) wants to transform itself into a technology-driven large bank and will soon embrace newer concepts like Application Programme Interface (API)-driven “open banking”, its newly appointed Managing Director & CEO SS Mallikarjuna Rao said.

“We (PNB) have to become a more digitalised bank. There is no choice for us. For a bank of this size, if we want to survive in the market against full blown competition we will have to transform ourselves into a more digitalised service delivery banking,” Rao told BusinessLine in an interview, two days after he assumed charge.

An API-based ‘open banking’ platform will help PNB get a more accurate picture of a consumer’s financial situation and risk level so as to offer better loan terms. For consumers, it will help get a more accurate picture of their own finances before taking on debt and avail of other banking products and services.

Rao, who has over three decades of experience as a banker, shared some of his strategic plans for the combined entity post amalgamation with Oriental Bank of Commerce and United Bank of India with effect from April 1 next year.

“As we move into becoming a more digitalised bank, the number of physical bank branches under the combined entity will be rationalised. We will facilitate the current thinking of customers who feel banking is required, but not the bankers. We will adopt open banking shortly. We are almost limiting the requirement of a customer to visit the bank branch,” he said.

The amalgamation of PNB, Oriental Bank of Commerce and United Bank of India will lead to a bank with a combined business mix of ₹18 lakh crore and have over 1 lakh employees and a network of 11,878 branches.

“There is no plan to reduce our employee strength despite embarking on new technological advancements. All their perquisites and salary will continue under the proposed new entity,” he said.

Business growth

Rao said PNB will not lose focus on business growth while undergoing the transformation of amalgamation.

“We don’t want to take our eyes off growth despite proposed consolidation and mergers. We want overall business growth of atleast 12 per cent in 2019-20, 2020-21 and 2021-22.

We would like to retain our number two position in the years to come in the banking space,” he said.

Nirav Modi scam

Rao said PNB, which went through turbulent times in the last few years post the ₹13,000-crore Nirav Modi perpetrated scam, is almost now “out of it”, but the scar remains in terms of perception.

“There are three or four dimensions to this — legal course of action on the employees involved in the proceeding (we don't want to intervene in that); provision in the books of accounts and this has been done; real recovery where efforts are going on and fourth is ‘perception’ where there is some more work to do,” he said.

Rao also said that checks and balances have been introduced by the RBI and PNB is also starting to implement more measures on the risk management and control front.

Townhall meetings

To assure customers that business will be as usual post amalgamation, Rao said he would, along with the chief executives of the other two banks, travel around the country from October 9 to hold “townhall” meetings.

“We would like to hold on to all the customers of the three banks. We don't want any opportunity to be given to our customers to feel displeased that we are not giving any service,” he said.

Rao said PNB, along with OBC and United Bank, was working on business, technology integration and employee integration. “We will create a unified organisation culture ultimately after the integration. Consultants will only be facilitators to provide support. We understand our anatomy much better than consultants,” he added.